SHOW ME THE MONEY!
Routinely couples, whether married or just in a commited relationship, will come to my office to apply for a mortgage and only one of the parties present is aware of the “family” finances. Or, one member of the couple will come in to get the process started because of work or scheduling conflicts of the other individual, only to discover they don’t know enough about their joint finances to go through the application process.
Do you know where the money is? Do you know how it’s invested? Do you know what interest rate you are paying on your credit accounts and/or current mortgage? Where are your important documents kept? Who is your insurance carrier? These are all fairly basic pieces of financial information but, more often than not, only one member of the couple knows the answer. Show me the money! Let’s talk Turkey! However you want to say it, it boils down to one thing, both individuals should know what their financial picture looks like.
For anyone to be able to maintain a good financial and credit history, they first need to understand what they have, what they owe, how much interest they’re paying for it, how it is insured and where the supporting documentation for everything is kept. It is fine for one member of the couple to handle the details of paying the bills, making the deposits, etc. as long as both are aware of the overall situation. Remember, sharing finances with someone means that you get the good with the bad. If one party is great at making sure the the bills are paid on time each month, then both will benefit. However, if the party responsible for paying the bills isn’t timely, both will suffer the credit consequences.
I hear comments from clients such as “well, he does a better job with that than me” or “she’s just more organized than me” and allowing the person with more organization skills or financial savvy handle the day-to-day responsibilities is fine. But that does not mean that you can abdicate your responsibility in maintaining a good grasp of your financial picture.
As a couple, it is imperative in sharing finances that you have shared goals for your financial future. Most people argue over money because they are not in agreement on what should be done with it, how it should be invested or what it is spent on. If you take the time to sit down together, review your finances regularly and agree on what your finanical goals are and the process you plan to use to achieve them, then the likelihood of arguments over money is greatly reduced. It may mean you have to agree to compromise. One individual believes in the need to save funds in safe, insured accounts, while one individual believes in the need to invest in potentially riskier ventures, you may have to agree to do a little of both. Or you may agree to be more conservative now in order to have the flexibility for more adventurous investing later. It doesn’t matter how you decide to compromise as long as you both understand the ups and downs of the decisions you make.
This is where the help of a good financial advisor and/or CPA can be beneficial. Also, there are numerous good books readily available, at the local bookstore or library, to assist you in understanding and developing your plan. Whatever you want your financial picture to be, it can be realized if you are willing to invest the time, focus and research necessary to make it happen.